close menu

Inheritance tax update: Good news for home owners

by Sherron Alexander-Bedingfield | Nov 22, 2016
  • The ability to pass on your home to your children has been a common wish for many homeowners. However, with the average price of a family home increasing year-on-year, the likelihood of this happening without inheritance tax implications has been an increasing concern.
    British cottage

    However, as of 6 April 2017, the main residence nil-rate band comes into effect. This should make it easier for most families to pass on the family home to direct descendants. In the months leading up to this date, it is prudent to review any existing will to ensure that it still reflects your wishes. You should also think about effective inheritance tax planning.

    At present, each individual has a nil-rate band allowance of £325,000. This level has remained frozen since 2010/11 and is likely to remain so until 2020/21. However, as of April 2017 an extra £100,000 allowance will be given to individuals in the form of the nil-rate band residence threshold. This will increase by £25,000 each tax year until it reaches £175,000 in 2020/21. Thereafter it will increase in line with the Consumer Price Index.

    However, all is not as simple as it appears. Readers should ensure that they seek professional advice and find out how, if at all, the nil-rate band residence threshold applies to them. Some of the main points to highlight are:

    • Relevant property
      Buy-to-let properties do not qualify. Your executor must show evidence that you have lived in the property at some point. This property does not have to have been your main residence.
    • Downsizing
      Homes sold/downsized post-July 2015 may still qualify for the nil-rate band residence threshold, provided you can show evidence of the funds.
    • Direct descendants
      The rules will only apply if the relevant home is being transferred to a direct/lineal descendant. So children and grandchildren can inherit, but not nieces, nephews or godchildren.
    • Property only
      The nil-rate band residence threshold only relates to property. So if you have assets that do not comprise of a relevant property then you will not have the additional allowance, only the standard nil-rate band of £325,000.
    • Estates worth more than £2 million net
      These estates will have the nil-rate band residence threshold withdrawn at a rate of £1 for every £2 over the threshold.

    In light of the above, now more than ever, a review of your existing will is needed.  For more information, visit our website, where you can find further details of all the services offered, including wealth management and inheritance tax planning.

    For wills-related advice please contact me at or call me on +44 (0) 20 7759 5531.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

    • Typical-english-house
      Common mistakes that first-time homebuyers make
      Dec 06, 2018  |  by Ian Henning
    • Man-on-a-rocket
      Are you a UK contractor? Maximise tax-efficiency by using your pension
      Sep 25, 2018  |  by Bill Monty
    • terraced-houses-in-london
      Are you a UK contractor? Here’s how to get your mortgage approved
      Sep 12, 2018  |  by Marlon Borez
    • property-feud
      The hidden dangers of not having a will in the UK
      Sep 07, 2018  |  by Sherron Alexander-Bedingfield
    • carrot-incentive-running-track
      UK pensions: Between a QROP and a hard place? Or is it a damp SIPP?
      Jun 21, 2018  |  by Niel Pretorius
    • piggy-bank-dollar
      What to do with your living annuity when you retire abroad
      Jun 11, 2018  |  by Niel Pretorius
    • house-london
      In the UK, mortgage inaction is pickpocketing thousands of homeowners
      Jun 07, 2018  |  by Bill Monty
    • Hand-currency-blue
      Saying goodbye to South Africa? Financial emigration can give you access to your RA before you turn 55
      Apr 13, 2018  |  by Niel Pretorius
    • Dubai_skyline
      Lessons learned on a trip to Dubai: South Africans take note
      Nov 10, 2017  |  by Mike Abbott
    • Piggy-banks-thinking
      Financial emigration: Transfer your retirement annuities out of South Africa
      Oct 20, 2017  |  by Niel Pretorius

    South Africa

    Cape Town

    Regent Square
    Doncaster Road
    Kenilworth 7708 +27 (0) 21 657 2120


    25 Richefond Circle
    Umhlanga 4320 +27 (0) 31 536 8843

    United Kingdom


    Castlewood House
    77/91 New Oxford Street
    WC1A 1DG +44 (0) 20 7759 7514


    5-7 Selsdon Road
    South Croydon
    CR2 6PU +44 (0) 20 7759 7581



    9 Yarra Street
    South Yarra
    VIC 3141 +613 (0) 8651 4500

    Sable International is a trading name of 1st Contact Money Limited (company number 07070528), registered in England and Wales. We are authorised and regulated by the Financial Conduct Authority in the UK (FCA no. 517570), the Financial Services Conduct Authority in South Africa (1st Contact Money [PTY] Ltd - FSP no. 41900) and hold an Australian Financial Services License issued by ASIC to deal in foreign exchange (1st Contact Group - AFS License number 335 126).

    We use cookies to provide the best website experience for you. Using this website means that you agree to this. How we use cookies.